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Emily & I have been thinking of getting our first house, so we haven’t applied for many credit cards in the past year. But I couldn’t wait any longer!
So I applied for 3 credit cards at the end of January and got approved for all of them!
Read This Before Applying!
In general, credit card applications will reduce your credit score by 3 to 8 points per application, in the short term. But your score should go back to what it used to be or even increase because of the lower debt utilization ratio when you get more credit.
I do not recommend applying for credit cards if you plan on taking out a major loan within the next 1 to 2 years.
We pay our credit cards off every month. Carrying a balance on your card and paying interest usually negates any savings you get with miles and points.
If you are new to this, please read the 5 Dangers of Credit Cards before applying for a card.
Note that you should NOT apply for multiple cards just because I or other bloggers do. As always, do what is comfortable for you! Make sure you can meet the minimum spending requirements comfortably. There is no harm in applying for just 1 or 2 cards at a time.
If I were applying for a big loan, I wouldn’t apply for any credit cards until I had my loan. Much better, in my opinion, to do everything possible to get a low interest rate on the big loan first, and then apply for credit cards. And to be as conservative as possible, I wouldn’t apply for many cards in the 2 years before a mortgage or refinance.
Pick Your Travel Goals
Emily and I set travel goals and we then collect miles and points to achieve those goals. Our goals are quite simple. We want to have enough miles and points to travel within the US in coach to visit friends, to go to Michigan or Ohio to visit family and to have weekend getaways.
We also want to travel internationally 2 to 3 times a year – ideally in business or first class, but we’ll choose a flight in coach if it means less connections and more time on the ground (like we did when we visited Brazil during Carnival).
We also need hotel points since we have to stay somewhere. We don’t really care which airline we fly or hotel we stay in as long as we can save money while traveling.
Having points spread among different airlines, hotels and cash back cards gives us many more options when it is time to book our trips!
Daraius’ January 2014 Cards
Minimum Spending Required
|Total||100,000 miles & $890 in Statement Credits||$14,000 in 3 Months||$450 NOT Waived for 1st Year|
|Barclays Arrival||40,000 Miles or ~$440 Towards Travel||$3,000 in 3 Months||$89 Annual Fee Waived for 1st Year|
|American Express SimplyCash (Business Card)||$250 Statement Credit||$3,000 in 3 Months||No Annual Fee|
|Citi American Airlines Executive||100,000 Miles, $200 Statement Credit & American Airlines Lounge Access||$10,000 in 3 Months||$450 NOT Waived for 1st Year|
Many reward cards require minimum spending for the sign-up bonus. I always make certain I can meet the spending requirement before applying. Read my post on 40+ ways to complete minimum spending requirements for tips on completing the spending.
Credit Card Resources
Here are a few resources which list the best miles and points deals and tips on meeting the minimum spending.
- Hot Deals tab which lists my favorite cards with a large sign-up bonus or great perks
- 40+ Powerful Ways To Complete Your Credit Card Minimum Spending Requirements to help complete the minimum spending requirements on credit cards
- Paying bills such as my rent, car loans, student loans, and other bills
3 Cards from 3 Different Banks
In general, we apply for credit cards from different banks, every 3 to 4 months, so that we don’t have credit inquiries (which usually happens every time you apply for credit) hitting only 1 credit bureau.
I want to limit the number of inquiries on each of the credit bureaus because banks don’t like seeing too many inquiries (especially in the last 6 to 12 months) on your credit report. If you apply for 1 or 2 cards at a time, I wouldn’t worry too much about this.
Equifax, Experian, and TransUnion are the 3 main credit bureaus in the US. Banks will usually request a copy of your credit report from at least 1 (sometimes more) of these credit bureaus. The exact credit bureau used depends on where you live and which bank you’ve applied for credit from.
1. Barclaycard Arrival Plus™ World Elite MasterCard®
I applied for the Barclaycard Arrival Plus™ World Elite MasterCard® 1st because Barclays is very sensitive to the number of credit inquiries on your credit report. They also like to see you regularly using their cards (if you already have a Barclays card such as the Barclays US Air card etc.)
I was eager to get the Barclaycard Arrival Plus™ World Elite MasterCard® because you get 40,000 miles after spending $3,000 within 3 months.
These 40,000 miles are worth ~$440 if your redeem them for travel. You can use these miles for ANY flight or hotel expense, so you don’t have to hunt for low-level flights when you use your Barclaycard Arrival Plus™ World Elite MasterCard® miles.
A lot of folks prefer cash back to earning miles and points. And the Barclaycard Arrival Plus™ World Elite MasterCard® is the best cash back card if you redeem for travel because you get ~2.2% cash back for travel redemptions! The card also has no foreign transaction fees, so you’re not paying extra when you use the card outside the US.
I was thrilled when I got instantly approved for the card with a very generous $15,000 credit limit!
2. American Express SimplyCash
Next, I applied for the American Express SimplyCash credit card. This is a business card. I applied using the Million Mile Secrets Tax ID.
Many folks often aren’t certain if they are eligible for a business card. You may qualify for a business card if you own an existing business or are starting a business.
This is a great card with NO annual fee and which offers up to 5% cash back! And up to April 28, 2014, there is a limited time offer where you can get a $250 statement credit after spending $3,000 within 3 months.
I can use this statement credit towards any type of travel or non-travel expense! And a $250 statement credit is quite good on a card which has no annual fee.
That’s because the Ink Bold and the Ink Plus earn 5X Ultimate Rewards points at Office Supply stores and for wireless service. But I also have the flexibility of transferring the Ultimate Rewards points to hotels such as Hyatt or to airlines such as United or Southwest. Or I can redeem the 5X Ultimate Rewards points for 5% cash back if I want.
However, you can also get 3% cash back on your choice of 1 out of 7 categories (includes gas, airfare, hotels, restaurants etc.).
I plan on keeping the SimplyCash card for a long time to build a relationship with American Express because it has no annual fee. And to get 3% back on either US restaurants, shipping or advertising (I have to pick 1 category).
However, I won’t use this card outside the US because of the 2.7% foreign transaction fee.
3. Citi American Airlines Executive Card
You earn 100,000 American Airlines miles and a $200 statement credit after spending $10,000 within 3 months.
The card has a $450 annual fee, but you get a $200 statement credit when you spend more than $200 on the card. So you’re effectively paying $250 for 100,000 American Airlines miles and access to the American Airlines lounges at airports.
This is one of the best deals which I’ve seen in the last year.
I love American Airline miles because they are relatively easy to use – either for domestic US travel or for First Class international travel. Here’s my series on how to redeem your American Airlines miles.
You also get 1 free checked bag and priority check-in and boarding with the card. You can apply for the Citi Executive card even if you already have another Citi American Airlines card. Just make sure that you wait ~8 days between personal Citi applications and don’t apply for more than 2 cards within ~65 days.
I had to call 800-695-5171 to get approved for the card. The representatve just transferred credit from an existing Citi card and I was approved!
Credit Score Impact
But these are good substitutes for us because we don’t want to spend money to get our official credit score.
1. Credit Sesame
Credit Sesame gives me a substitute of my Experian score. But for whatever reason, my Credit Sesame score wasn’t updated. I got a message saying that it would be updated in a few days.
2. Credit Karma
Credit Karma gives me a substitute of my TransUnion credit score score.
My score appears to have increased slightly with my 3 new cards!
Many of the millions of miles which Emily and I use for Big Travel with Small Money have come from credit card sign-up bonuses.
We use our miles and points for a mix of domestic travel, international travel, and to spend time with friends and family. The minimum spending may seem high, but there are many ways to meet the minimum spending requirement creatively!
This is a great way to earn lots of miles and points, but you HAVE to be careful.
Don’t apply for credit cards if you can’t pay off the entire balance monthly. You’ll likely be paying more in interest than the value of the miles and points. And don’t apply for credit cards if you will be applying for a big loan in the next 1 to 2 years.
Oh, and again read The 5 Dangers of Credit Cards before applying for a credit card!
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